It didn’t take me long to compile this list as they are mistakes I’ve made and some of them more than once. With the right systems and discipline you can change your money game in order for your business to stay afloat.
1 – Setting your prices too low. Many entrepreneurs believe that they will get ahead by being the cheapest on the block but that’s not so. If your prices are too low and they don’t allow you to properly serve your customers then they won’t do business with you for long. Don’t be afraid to be more expensive than your competitors if you are offering more value and better service.
2 – Setting prices based on time and not value. Consider a software developer who may deliver a business application to a client in a matter of days but which allows them to make millions of dollars. If she only charged for the time spent on the work it doesn’t represent the true value of what she delivered, which is the opportunity to make millions. Know the true value of what you provide to your clients and price accordingly. Charging too low sends the message that your work is subpar.
3 – Setting prices based on supplies and not including your time. It may seem like a no brainer but often when you enjoy what you do, you forget to include the fact that it takes you time to do the work and that has a cost. Going to pick up the wood, building the cabinets, delivering and installing them has a value. Keep track of your hours over several tasks to help you understand how much time it takes you to deliver on different types of projects and include that in your quote.
4 – Not saving. Oh happy day. You got paid and there are bills to pay and fun to be had. By all means pay your bills but save as well. While it would be a real ego boost to run out and by that new SUV with your profits, a better plan would be to reinvest the money in the business, even if it means hiring a financial planner, taking a marketing course or purchasing a new computer. Practice this rule. Spend some. Save some. Give some.
5 – Not keeping good records. There is nothing more embarrassing than a bounced check. Take the time to file your bank slips, invoices, and receipts. At all times you should be aware of how much money is outstanding, how much you need to pay out to suppliers and service providers. Design a strategy to collect payments in a timely manner to keep your business out of the red.
Nerissa Golden is an award-winning Media Strategist, Business Coach and author who helps her clients accelerate their business growth by leveraging high impact communications solutions and income generating strategies. Get tips on starting and growing a business at www.trulycaribbean.net. Follow her on Twitter @trulygolden.